Fossil fuel subsidies in Australia Federal and state government assistance to fossil fuel producers and major users 2020-21 In 2020-21, Australian Federal and state governments provided a total of $10.3 billion worth of spending and tax breaks to assist fossil fuel industries. The $7.8 billion cost of the fuel tax rebate alone is more than the budget of the Australian Army. Over the longer term, $8.3 billion is committed to subsidising gas extraction, coal- fired power, coal railways, ports, carbon capture and storage, and other measures. Rod Campbell Eliza Littleton Alia Armistead April 2021
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Fossil fuel subsidies in Australia Federal and state government assistance to fossil fuel producers and major users 2020-21
In 2020-21, Australian Federal and state governments provided a total of $10.3 billion worth
of spending and tax breaks to assist fossil fuel industries. The $7.8 billion cost of the fuel tax rebate alone is more than the budget of the
Australian Army. Over the longer term, $8.3 billion is committed to subsidising gas extraction, coal-fired power, coal railways, ports, carbon capture
and storage, and other measures.
Rod Campbell
Eliza Littleton
Alia Armistead
April 2021
ABOUT THE AUSTRALIA INSTITUTE
The Australia Institute is an independent public policy think tank based in Canberra. It
is funded by donations from philanthropic trusts and individuals and commissioned
research. We barrack for ideas, not political parties or candidates. Since its launch in
1994, the Institute has carried out highly influential research on a broad range of
economic, social and environmental issues.
OUR PHILOSOPHY
As we begin the 21st century, new dilemmas confront our society and our planet.
Unprecedented levels of consumption co-exist with extreme poverty. Through new
technology we are more connected than we have ever been, yet civic engagement is
australias-fossil-fuel-mining-and-exports/ 3 Ibid. 4 United Nations (2020) Continuing Current Trends Will Lead to Unimaginable Suffering Worldwide, Secretary-
General Tells High-Level Round Table on Climate Ambition,
https://www.un.org/press/en/2020/sgsm20280.doc.htm 5 US Treasury (2021) The made in America tax plan,
2018_9789264286061-en#page4 8 Productivity Commission (2020) Trade and assistance review 2018-19,
https://www.pc.gov.au/research/ongoing/trade-assistance/2018-19 9 Grudnoff (2013) Pouring more fuel on the fire: The nature and extent of federal government subsidies to the
mining industry, https://australiainstitute.org.au/report/pouring-more-fuel-on-the-fire/; Peel et al (2014)
Mining the age of entitlement: State government assistance to the minerals and fossil fuel sector,
https://australiainstitute.org.au/report/mining-the-age-of-entitlement/ 10 Market Forces (2017) How your tax dollars subsidise fossil fuels,
Estimates of subsidies and other assistance to fossil fuels are for the 2020-21 budget year,
with a small number of exceptions where the 2019-20 estimate is the latest available and a
similar result is likely in the following year. Funding for fossil fuel projects or programs that
have been announced since the publication of 2020-21 Federal, State and Territory Budget
Papers have not been included in this analysis.
We have compiled estimates of assistance in 2020-21 and a separate estimate of the total
value of programs/projects that run over a number of years. This includes multi-year
funding packages for non-ongoing projects, and capital value of long-term physical assets.
Estimating the value of industry assistance from ongoing programs such as long-running tax
breaks and established government departments is difficult as estimating the long-term cost
into a present value would require forecasting government policy and assigning a relevant
discount rate. To avoid these risks of misrepresentation, only the relevant spending for the
2020-21 year is included for such items. This is perhaps relevant to the fuel tax credit
scheme, which dominates overall results for 2020-21, and analysis of its estimated costs
over the forward estimates is included in the Federal Government section.
Relevant tax breaks, known as concessions, on existing taxes reduce revenue and carry
opportunity costs for governments. Such concessions are included in our estimates where
they advantage major fossil fuel producers and users, through a reduced tax rate and their
value is calculated in budget documents. This approach means the federal fuel tax rebate is
included (it applies only to certain fossil fuel users and is calculated in budget documents),
but the benefit to similar parties provided by the abolition of carbon pricing is not (no group
pays an explicit carbon price and the lost revenue is not calculated in budget documents).
All items of expenditure were classified according to which type of fossil fuel industry
segment was the beneficiary: coal, gas/oil or various. Items categorised as “various”
provided support to several segments or referred to a larger industry investment. For
example, many of Queensland’s ports import and export a combination of coal, oil, gas and
other products, and were thus categorised as “various”.
Subsidies were assessed as being wholly, primarily, or only partly dedicated to these
industries:
• Subsidies classified as wholly dedicated to fossil fuels were judged to be undertaken
for the singular purpose of supporting the consumption, extraction, processing, or
transport of fossil fuel commodities. An example is the Queensland Government’s
$2.5 million funding for the pre-feasibility study into the Bowen Basin gas pipeline,
which would connect the Bowen Basin to east coast energy markets and export
Fossil fuel subsidies in Australia 8
terminals, allowing the development of new gas basins and use of gas from existing
underground coal mines.
• Items were considered primarily dedicated to fossil fuels were those where the fossil
fuel industry received tangible economic benefit from the spending, but were not
the exclusive beneficiaries. An example is the federally-owned Australian Rail Track
Corporation’s $130.2 million capital expenditure on the Hunter Valley Rail Network
in 2020-21, the benefits of which abundantly accrue to the coal industry, but also
some other industries and passenger services.
• In cases where expenditure was categorised as partly dedicated to fossil fuels, the
industry received a tangible economic benefit from the spending, but that benefit
was not the primary aim of the project or it was not clear which stakeholders
received the primary benefit. Infrastructure projects often fall into this category as
fossil fuel producers may be major, but not primary, users of these resources.
However, a range of resource and other industries may also use the same
infrastructure. The new Darwin Ship Lift, funded by the NT Government and the
Federal Northern Australia Infrastructure Facility, will partly benefit ships that
service the offshore oil and gas industry, but is also aimed at defence and other
marine services.
• Where spending benefits the fossil fuel industry either incidentally, or at levels too
low to be differentiated in official documents, these items were not included. For
example, Tasmania’s mining exploration grants have benefited coal mining
companies, but are small in the context of the program and the state budget, and
were not easily identified within budget papers or other official documents of the
2020-21 year.
Some spending by government departments has been included where:
• The role of the department includes provision of services (particularly geoscience
information), or activities that incentivise and promote fossil fuel investment and
production. Often these bodies also play a more basic regulatory role, or promote
not just fossil fuels but also the wider mining industry. In such cases, the spending is
considered as only partly dedicated to fossil fuel assistance.
• Significant under-recovery of regulatory expenses has been identified. Agencies that
incur significant administrative costs, but charge few fees to the fossil fuel industries
they are administering. One clear example is the NT’s onshore gas regulator, where
an independent inquiry in 2018 highlighted its costs and minimal revenue, but this
has not been addressed some years later despite increased budget allocation.
Fossil fuel subsidies in Australia 9
Queensland Treasury highlights that “mining regulation expenses are now
material”13 and some regulators that make minimal effort to recover such expenses.
Carbon capture and storage (CCS, sometimes including “use and storage” and abbreviated
as CCUS) is generally considered to be dedicated wholly to fossil fuel industries. While much
climate research suggests CCS will be necessary to reduce emissions from sectors that are
difficult to decarbonise, the intended purpose of most CCS projects funded by state and
federal governments is to enable the continued operation of fossil fuel industries. For
example, the Federal Government’s Carbon Capture, Use and Storage Development Fund
has a stated intention to “support emissions reduction in power generation, cement, natural
gas production or heavy industry.” 14
Hydrogen can be derived through a number of different methods, including renewable
energy, processing from fossil gas and gasification of coal. Unless hydrogen project funding
specifies that it only applies to renewable-derived hydrogen, it is included as at least partly a
subsidy to fossil fuels.
13 Queensland Treasury (2020) Queensland response to the Draft Report on the 2020 Methodology Review,
https://www.cgc.gov.au/sites/default/files/qld_submission_-_2020_review_draft_report.pdf 14 Australian Government (2020) Industry, Science, Energy and Resources,
PRRT — gas transfer price regulations Wholly Gas $55,000,000
PRRT — starting base and uplift rate for capital assets
Wholly Gas/Oil $55,000,000
Total $1,030,000,000
Source: 2020 Tax Benchmarks and Variations Statement
The largest concession in Table 4 relates to aviation gasoline and turbine fuel. Civil aviation
companies pay a lower rate of excise than other fuel users. Other discounts apply to
“alternative fuels”, a category that includes liquified petroleum gas (LPG) and liquified
natural gas (LNG). Like the fuel tax credit discussed above, lowering the price of fossil fuels
for selected users reduces government revenue, transferring costs onto other parties, and
also reduces incentives to minimise fossil fuel use and related pollution.
Petroleum resource rent tax (PRRT) is levied on the profits generated from the sale of oil
and gas. However, a range of concessions reduce the amount of PRRT paid by the industry,
including credits for any tax losses, the use of a pricing method that undervalues gas, and
deductions based on the value of project assets that can be carried forward and uplifted.
BUDGETED SUBSIDIES AND COSTS
Geoscience Australia — Exploring for the future
Geoscience Australia is the Australian Government’s provider of geology and geoscience
information. Some of its projects overtly subsidise fossil fuel production:
For [the oil and gas] industry to commit to exploration in frontier regions, additional
pre-competitive information is needed to adequately evaluate the resource
potential. This will effectively de-risk the area and give industry the confidence to
initiate exploration activities.22
22 Geoscience Australia (n.d.) Exploring for the future: Energy, https://www.ga.gov.au/eftf/energy
Fossil fuel subsidies in Australia 19
In addition to its usual budget of around $250 million per year, in the 2020-21 budget an
additional $124.5 million was allocated to Geoscience Australia to fund the extension of its
Exploring for the Future program from its focus on northern Australia to include southern
Australia. The program involves exploring, identifying and encouraging investment in oil and
gas by publishing survey, mapping, sampling and drilling data.23 Some $20.4 million is
budgeted for 2020-21 from the total project cost over several years of $124.5 million. These
figures are included in Table 4 as partly dedicated to assisting fossil fuel industries, as non-
fossil fuel industries also receive benefit from this expenditure.
JobMaker Plan — Gas-fired recovery
The Budget allocated $52.9 million over four years ($23.8 million in 2020-21) to a “gas-fired
recovery” aimed at increasing gas supply and subsidising gas infrastructure. These sums are
included in Table 4 as “wholly” dedicated to fossil fuel industries. This includes government
support for a range of gas subsidies:
• $28.3 million over three years to accelerate development of “strategic” gas basins.24
• $13.7 million over four years for the Gas Industry Social and Environmental Research
Alliance (GISERA). The CSIRO is a member of GISERA, along with Santos, Origin
Energy, QGC (owned by Shell, China National Offshore Oil Corporation and Tokyo
Gas) and Australia Pacific LNG (owned by Origin, ConocoPhilips and Sinopec).
• $10.9 million to develop the National Gas Infrastructure Plan, which is designed to
encourage private investment through government subsidy of the gas industry.
In January 2021, the first of the “strategic” gas basin plans was released for NT’s Beetaloo
Basin. Media reports of the announcement said that an additional $173 million would be
spent in subsidising the gas industry in the Basin. This funding should appear in the 2021-22
budget and is not included in calculations here.25
JobMaker Plan — Investment in new energy technology
As part of the 2020 JobMaker plan, the Federal Government established an investment
package dedicated to new energy technologies. While the stated aim is to reduce emissions,
some of the initiatives support the fossil fuel industry. These include:
23 Australian Government (no date) Exploring for the Future: Energy, https://www.ga.gov.au/eftf/energy 24 Australian Government (2021) The Beetaloo Strategic Basin Plan released as part of the gas-fired economic
o the hydrogen energy supply chain pilot project will receive $12.5 million in
2020-21 to support a feasibility study of hydrogen production from
gasification of Victorian brown coal for export to Japan. The Federal
Government’s total contribution to this program is $50 million.
o A total of $95.2 million has been allocated to the CarbonNet CCS program in
the Latrobe Valley.
See the chapter on Victoria for more details on the final two projects.
JobMaker Plan — securing Australia’s liquid fuel stocks
A total of $250.7 million will be provided to various support measures for oil and other
liquid fuel supplies. The largest component is $203.7 million in grants for new diesel fuel
storages. This funding is over ten years with $17.8 million budgeted for 2020-21.
Non-disclosed funding for fossil fuels
The Government has been maintaining the Northern Endeavour, an oil rig in the Timor Sea,
since its owner went into liquidation in February 2020. The Northern Endeavour received an
undisclosed amount of taxpayer funding in the 2020-21 Budget. It was therefore not
included in the calculation of subsidies in this analysis, but GR Engineering subsidiary
Upstream Production Solutions, which has been maintaining the rig, has since been
awarded a one-year contract worth $130 million by the Department to continue operating
the vessel.29
The 42-year-old Vales Point coal power station on Lake Macquarie in NSW emits around
seven million tonnes of greenhouse gas emissions into the atmosphere every year and is
due to close in 2029. In the Budget, the Government has allocated an unspecified amount of
taxpayer’s money to upgrade Vales Point, although media reports suggest the company has
rejected the grant as the reported $8.7 million would take too long to be processed for the
company’s investment requirements.30
Australian Rail Track Corporation (ARTC)
The Federal Government-owned ARTC is responsible for the Hunter Valley coal rail network.
$130.2 million in new capital expenditure was spent in the last reported year. This sum is
included in federal calculations as capital expenditure and 2020-21 spending. See NSW
chapter for further discussion.
29 Milne, P. (2020) Northern Endeavour debacle hits $209M with much more to come,
https://www.boilingcold.com.au/northern-endeavour-debacle-hits-209m-with-much-more-to-come/ 30 Mazengarb (2021) Delta turns down Taylor’s $8.7 million grant for Vales Point upgrades,
account and granted a $500,000 loan for “other energy generation” to Ensight Pty Ltd, a
company whose list of clients consists almost exclusively of multinational fossil fuel
producers.
In the 2020-21 budget, a $500 million “COVID-19 Export Capital Facility” was provided to
Export Finance Australia, which appears likely to partly benefit fossil fuel industries, but has
not been included in calculations in this report.
Fossil fuel subsidies in Australia 24
Queensland
Queensland is Australia’s largest state for onshore gas production and has extensive
undeveloped gas and petroleum resources basins.34 In 2019-20, Queensland exported LNG
valued $15.7 billion, thermal coal valued $6 billion and metallurgical coal valued at $37
billion.35 Coal and gas are primarily exported to China, Korea and Japan.36 There are 29
operating coal mines in Queensland and 450 active exploration permits for coal with
exploration expenditure in 2018-19 worth $138.4 million.37
Total Queensland gas exploration was worth $194 million in 2018-19, including private
sector investment and exploration for metallurgical coal, and is exported primarily to
China.38 More than 93% of Australia’s potential coal seam gas reserves are in Queensland.39
The Queensland Government’s Budget 2020-21 (referred to for the remainder of this
chapter as “the Budget”) dedicates more than $744 million to assisting fossil fuel
developments in the state, including the development of coal and gas exploration and
extraction, and the provision of financial assistance to the import and export of coal, gas
and oil products. Additionally, concessions resulting in forgone government revenue in the
Budget are worth $86.9 million.
34 Ibid. 35 Queensland Government (n.d.) Economic dashboard, https://www.treasury.qld.gov.au/queenslands-
economy/economic-dashboard/ 36 Queensland Government (n.d.) National Resources Inventory for Queensland,
https://inventory.dnrme.qld.gov.au/energy?p1=coalThermal&&p3=mp_e_ren_solar&& 37 Ibid. 38 Ibid. 39 Geoscience Australia (n.d.) Australian Energy Resources Assessment (AERA), https://aera.ga.gov.au/#!/gas
Table 5: Queensland Government 2020-21 fossil fuel subsidies
QLD budget fossil fuel assistance
Total/capital value 2020-21 expenditure
Wholly $1,456,970,000 $382,662,000
Primarily $34,141,000 $153,089,000
Partly $123,670,000 $208,421,000
Total $1,614,781,000 $744,172,000
Coal $1,395,473,000 $431,258,000
Gas $163,467,000 $23,499,000
Gas/oil $16,716,000 $500,000
Oil $0 $84,663,000
Various $39,125,000 $204,252,000
Total $1,614,781,000 $744,172,000 Source: Queensland Government (2020) Budget Papers 2020-21
COAL MINES AND POWER STATIONS
Callide Power Station and Calvale Substation
Callide Power Station is a 1,525 megawatt (MW) black coal-fired power station in Biloela,
Central Queensland, operated by government-owned CS Energy.40 Callide Power Station
comprises three power stations – Callide A, Callide B and Callide C – that deliver energy to
the National Electricity Market. Callide A, the smallest of the three (120 MW), is currently
being decommissioned after taking part in the Callide Oxyfuel Project, which retrofitted the
power station to operate with carbon capture technology from 2012-15.41 Captured carbon
was used for injection tests at the CO2CRC Otway Project in South Western Victoria.42 The
project achieved 5,600 hours of carbon capture, but data on the quantity of carbon
captured from Callide A or stored at the injection site in Victoria are not available.43 CS
Energy wrote down the value of the Callide B and Callide C generators by $191.7 million and
$161.7 million respectively in December 2020, a move driven by electricity prices.44 The
Budget dedicates $88.1 million to Callide Power Station enhancements, overhauls and
refurbishment, with a capital value of $509.1 million. The Budget also provides $1.3 million
40 C. S. Energy (n.d.) Callide Power Station, https://www.csenergy.com.au/what-we-do/generating-energy/callide-power-station/callide-power-station 41 C. S Energy (n.d.) Callide Oxyfuel Project, CS Energy, https://www.csenergy.com.au/what-we-do/generating-energy/callide-power-station/callide-oxyfuel-project 42 Ibid. 43 C. S Energy (n.d.) The Callide Oxyfuel Project, https://www.csenergy.com.au/ArticleDocuments/222/Callide_Oxyfuel_Project_-_Completion_-_LEGACY_PUBLICATION_-_FINAL_eBook_artwork_-_smaller_size-1.pdf.aspx 44 Mazengarb (2020) Queensland budget delivers $500m renewables fund, as coal plant revenues slump,
software upgrades, amounting to $12.5 million with a capital value of $95.4 million,
classified as wholly dedicated to fossil fuels.
Swanbank E
Swanbank E is a 385 MW gas-fired power station operated by state-owned CleanCo in South
East Queensland.52 Swanbank E was mothballed in 2014 but brought back online in 2017
with financing from the Queensland Government.53 In February 2021 CleanCo, which
operates the Queensland Government’s zero emissions project investments, wrote off the
$35 million value of Swanbank E to zero and expects net losses from operating Swanbank E
until its expected retirement in 2036.54 The Budget allocates $7.1 million to Swanbank E
with capital value expenditure of $92.5 million post-2021 for operating costs.
Mine dozer replacement program
The Budget allocates $3.8 million to a Mine Dozer Replacement Program, which has a
capital value of $28.9 million. No information is available on the program and so is classified
as partly dedicated to fossil fuels.
PORTS
Fossil fuel subsidies in the Budget include funding for a number of ports in Queensland.
Queensland’s port sector is a significant recipient of Budget infrastructure funding to
support both imports and exports. Port-related Budget funding is granted to the Port of
Townsville Limited, Far North Queensland Ports Corporation Limited, Gladstone Ports
Corporation Limited and North Queensland Bulk Ports Corporation Limited. These port
companies manage both fossil fuel (gas, coal, oil/petroleum products) and non-fossil fuel
imports and exports, such as timber, sugar, cargo, agricultural and food products, and
minerals.
Port of Townsville
The Port of Townsville is a major Queensland port, through which companies including Shell,
Mobil, Caltex, BP, Ampol, Amco, HC Sleigh and Vacuum Oil Pty have been importing oil and
petroleum products since the 1930s.55 The Port of Townsville imports and exports a range of
products, including cement, vehicles, sugar, timber, agricultural products and minerals.56
Petroleum products, including petrol, diesel and aviation fuel, are the Port’s largest import
52 CleanCo Queensland (n.d.) Factsheet Swanbank E Power Station, https://cleancoqueensland.com.au/wp-content/uploads/Documents/Assets_and_Projects/Factsheet_Swanbank-E.pdf 53 Morrison (2021) Queensland writes off Swanbank E gas-fired power plant,
https://www.argusmedia.com/en/news/2184709-queensland-writes-off-swanbank-e-gasfired-power-plant 54 Ibid. 55 Port of Townsville (n.d.) Port History, https://www.townsville-port.com.au/about/port-history/ 56 Port of Townsville (n.d.) About Us, https://www.townsville-port.com.au/about/about-potl/
commodity.57 The 2020 Annual Report shows that due to COVID-19, imported fuel volumes
fell by 2% — but still remained the largest import, at 816,250 tonnes or 40% of total
imports.58
The Townsville Channel Capacity Upgrade (TCCU) will deliver 62 hectares of reclaimed land
for port operations and widen the shipping channel to allow access to larger vessels and
increase trade capacity for the region.59 The TCCU has received joint funding of $75 million
each from the Queensland and Australian Governments in addition to $43.5 million from
the Port of Townsville Limited and total costs are now estimated to be $232 million.60
Funding for the Port of Townsville in the Budget is $78.3 million for wharf facility and road
network upgrades, plant, equipment and minor works, and channel capacity upgrades,
considered primarily dedicated to fossil fuels.
Far North Queensland Ports Corporation Limited
Far North Queensland Ports Corporation Limited, trading as Ports North, owns and manages
the Port of Cairns and other small ports in Far North Queensland and trades a range of
products. Petroleum products made up 47% of imports for the Port of Cairns in the 2020
financial year and 3% of imports.61 Far North Queensland Ports Corporation Limited
received $6.4 million of funding in the Budget for general cargo consolidation, lease
acquisition, plant, equipment and minor works and site decontamination.
Gladstone Ports Corporation Limited
Gladstone Ports Corporation Limited operates the Port of Gladstone, Port Alma and the Port
of Bundaberg. Fossil fuel trade occurs primarily through the Port of Gladstone. In the 2020
financial year fossil fuels comprised a significant portion of trade at the Port of Gladstone.
Coal and LNG exports were 92% of total exports, while LPG and petroleum products were
6% of total imports.62
Budget items for Gladstone Ports Corporation Limited are for both the corporation broadly
and for specific Port of Gladstone services and operations. Funding for Auckland Point 3 is in
57 Port of Townsville (2020) Annual Report 2019-20, https://s3-ap-southeast-2.amazonaws.com/os-data-2/port-townsville/documents/port_of_townsville_annual_report_2020.pdf 58 Port of Townsville (2020) Annual Report 2019-20, https://s3-ap-southeast-2.amazonaws.com/os-data-2/port-townsville/documents/port_of_townsville_annual_report_2020.pdf 59 Queensland Budget 2020-21 Capital Statement p. 90 60 Queensland Budget 2020-21 Capital Statement p. 10 61 Ports North (n.d.) Annual Report 2019 2020, https://os-data-2.s3-ap-southeast-2.amazonaws.com/portsnorth-com-au/bundle1/200928_pn_ar_fy2020_website_version.pdf 62 Gladstone Ports Corporation Limited (n.d.) Origin & Destination of Cargoes Totals for the Financial Year 2020 (Gladstone), http://content1.gpcl.com.au/viewcontent/CargoComparisonsSelection/CargoOriginDestination.aspx?View=G&Durat=F&Key=2020
Budget papers refer to spending on the Townsville Regional Industrial Estate, which appears
to be within the Townsville State Development Area. The Townsville State Development
Area serves the Port of Townsville and nearby roads and rails that provide access to
industrial and resource development areas.67 The Townsville State Development Area is
currently home to a number of large-scale high-impact industries, including Origin Energy’s
Mt Stuart peaking generator plant.68 The Budget dedicates $200,000 to the Townsville
Regional Industrial Estate and identifies a capital value of $8.12 million, classified as
primarily dedicated to fossil fuels.
Gladstone State Development Area
The Gladstone State Development Area connects major rail and roads to processing facilities
and ports for large industrial activities, including a number of fossil fuel-related activities.
The Gladstone State Development Area includes Australia Pacific LNG, Santos Gladstone
LNG, Queensland Curtis LNG and Southern Oil’s northern oil refinery.69 The Budget
dedicates $500,000 to the Gladstone State Development area and identifies a capital value
of more than $16.7 million, classified as primarily dedicated to fossil fuels.
BOWEN BASIN GAS PIPELINE
The Bowen Basin is home to major open-cut and underground coal mines already operating,
as well as large quantities of largely unexploited gas.70 The Queensland Government states
that construction of a pipeline has the potential to open up new areas within the basin for
gas exploration, as well as capture unutilised gas from existing underground coal mines.71
The Bowen Basin gas pipeline is described as a “cornerstone” of the Queensland
Government’s COVID-19 recovery plan for Central Queensland, despite such investments
being largely ineffective as fiscal stimulus.72 The proposed pipeline would stretch 500km to
connect Bowen Basin gas reserves to east coast domestic markets and export terminals.73
67 Queensland Government (n.d.) Townsville State Development Area, https://www.statedevelopment.qld.gov.au/coordinator-general/state-development-areas/current/townsville-state-development-area 68 Ibid. 69 Queensland Government (n.d.) Gladstone State Development Area, https://www.statedevelopment.qld.gov.au/coordinator-general/state-development-areas/current/gladstone-state-development-area 70 Australian Government (2014) Bowen Basin, http://www.ga.gov.au/scientific-topics/energy/province-sedimentary-basin-geology/petroleum/onshore-australia/bowen-basin 71 Queensland Government (n.d.) Bowen Basin pipeline pre-feasibility study,
https://www.dnrme.qld.gov.au/mining-resources/initiatives/bowen-basin-pipeline 72 Denniss et al (2020) Design principles for fiscal policy in a pandemic,
The Queensland Government is also seeking investment from the Federal Government to
support the project.74
In February 2021 a Queensland company that is a first-time explorer was granted preferred
access for CSG exploration over an area of 114km2, part of a total 8,205km2 released by the
Queensland Government as part of the COVID-19 economic recovery plan.75
The pre-feasibility study for the Bowen Basin pipeline is a $5 million project with $2.5
million funding in the Budget, classified as wholly dedicated fossil fuel industry spending.
GAS DEVELOPMENT
The Queensland Government views gas as a critical resource for domestic energy security
and economic prosperity through exports and is dedicated to increasing gas development in
the state. Queensland’s large gas basins include the Surat, Bowen and Cooper Basins that
produce more than 90% of the state’s gas, while petroleum and coal areas such as the
Galilee Basin also produce some gas.76 In 2020 the Queensland Government opened up
3000km of new land for gas exploration,77 awarded new gas permits78 and allocated funding
for the Bowen Basin Gas Pipeline study,79 all of which serve to further expand gas
production in the state to support domestic gas consumption and increase gas exports. The
Budget 2020-21 includes $11.4 million for general “gas development” to be spent in 2020-
21. This allocation received no other explanation in the budget papers that we could find. In
our calculations this was classified as wholly dedicated to fossil fuels.
HOPELAND UNDERGROUND COAL GASIFICATION
The Queensland Government assumed responsibility for the Hopeland underground coal
gasification site in 2016 after management company Linc Energy entered liquidation.80 Just
prior to the transferral of responsibility for the site to the Queensland Government, an
Environmental Protection Order was issued, requiring Linc Energy to decommission most of
74 Ibid. 75 Queensland Government (n.d.) First time gas explorer gets green light in world class Bowen and Surat Basins, https://statements.qld.gov.au/statements/91399 76 Queensland Government (2015) Petroleum and coal seam gas, https://www.business.qld.gov.au/industries/mining-energy-water/resources/petroleum-energy/outlook-statistics/petroleum-gas 77 Hartmann (2020) Four companies get gas exploration greenlight in Queensland, https://www.energymagazine.com.au/four-companies-get-gas-exploration-greenlight-in-queensland/ 78 Santos (2020) Santos wins new gas exploration acreage in Queensland, https://www.santos.com/news/santos-wins-new-gas-exploration-acreage-in-queensland/ 79 Queensland Government (2020) Queensland’s economic recovery plan, https://www.covid19.qld.gov.au/__data/assets/pdf_file/0025/128194/economic-recovery-plan.pdf 80 Queensland Government (2017) Linc Energy, https://environment.des.qld.gov.au/management/monitoring/locations-of-interest/hopeland/linc-energy
the site’s dams.81 Linc Energy was convicted in 2019 by the Brisbane District Court of “five
counts of wilfully and unlawfully causing serious environmental harm…the result of the
largest and most complex environmental investigation conducted by the environmental
regulator in Queensland’s history.”82 The Queensland Government has been left to carry the
cost of this damage.
Funding from the Queensland Government is now dedicated to “investigating, isolating,
decommissioning, decontaminating and dismantling facilities” at the site.83 Stage 1 and
Stage 2 of the project have been completed and Stage 3 is underway, dedicated to
dismantling, decontaminating and removing gad-to-liquids infrastructure.84
The capital value of the Hopeland site remediation is $31 million,85 including Budget
allocation of $2.3 million. These sums are included in the summary table above as wholly
dedicated to subsidising the fossil fuel industry.
NORTH WEST MINERALS PROVINCE
The North West Minerals Province around Mount Isa and Cloncurry has been identified by
the Queensland Government as one of the world’s richest mineral-producing regions.86 In
the 2017-18 State Budget, $39 million was allocated over four years to facilitate resources
development in the region, diversify regional economies and create employment
opportunities, and work with businesses and communities to deliver services.87
Funding for the North West Minerals Province is intended for “internal cost and analysis”.
Initiatives for the North West Minerals Province are identified in the Strategic Blueprint for
the region. Natural gas geoscience exploration programs, data systems and development
potential outside existing gas basins are identified as priorities within the Strategic
Blueprint.88 Queensland’s Mining Equipment, Technology and Services (METS) sector, which
supplies equipment and services to the mining, oil and gas industries, is selected in the
Strategic Blueprint to host an annual technology and investor forum in Townsville.89 Funding
81 Ibid. 82 Ibid. 83 Queensland Government (n.d.) Hopeland (ex-Linc Energy),https://www.qld.gov.au/environment/land/management/abandoned-mines/projects/former-linc-energy-plant 84 Ibid. 85 Australasian Mine Safety Journal (2019) Queensland taxpayers to pay for cleanup,
https://www.amsj.com.au/queensland-taxpayers-to-pay-for-cleanup/ 86 Queensland Government (n.d.) A Strategic Blueprint for Queensland’s North West Minerals Province, https://www.statedevelopment.qld.gov.au/regions/regional-priorities/strategic-blueprint-nwmp 87 Ibid. 88 Ibid. 89 Ibid.
priority abandoned mines with a disturbance area of 10,300 hectares.96 Abandoned mines
are allocated $500,000 in the Budget. Funding is considered partly dedicated to fossil fuels
as abandoned mines for remediation include some coal mines, while a large number are old
gold rush era mining sites.97
ROADS
The Bowen Developmental Road sealing project, the first of ten such projects, will seal the
road and add a road shoulder between Rockingham Creek to Mount Coolon.98 This road
section is between Collinsville and Mount Coolon and used by heavy vehicles associated
with mining and agricultural operations.99 The Budget commits $7.6 million to the project in
2020-21, which has a total capital value of $28.8 million. Of the total investment, the
Federal Government contributed $23 million, classified as partly dedicated to fossil fuels.
RAIL
Mount Isa Line
The Mount Isa Line transports copper, lead, zinc, silver and phosphate rock, responsible for
75% of Queensland’s non-coal mineral output.100 However, the Mount Isa Line
Infrastructure Master Plan identifies that “current interest in developing substantial coal
deposits in the Northern Galilee Basin underwrite the unprecedented growth opportunities
for the Mount Isa Line”.101 The Port of Townsville is the primary destination for the majority
of products transported on the Mount Isa Line.102 The Budget allocates $12.5 million for
works on the Townsville-Mount Isa Rail Line, classified as partly dedicated to fossil fuels.
96 Queensland Government (2018) Achieving improved rehabilitation for Queensland: addressing the state’s abandoned mines legacy, https://s3.treasury.qld.gov.au/files/8243_Abandoned-Mines-Discussion-Paper_v61.pdf 97 Ibid. 98 Queensland Government (n.d.) Bowen Developmental Road sealing Rockingham Creek to Mount Coolon, https://sc-tmrwcmgr-cd.azurewebsites.net/projects/bowen-developmental-road-sealing-rockingham-creek-to-mount-coolon 99 Queensland Government (n.d.) Bowen Developmental Road sealing Rockingham Creek to Mount Coolon, https://sc-tmrwcmgr-cd.azurewebsites.net/projects/bowen-developmental-road-sealing-rockingham-creek-to-mount-coolon 100 Queensland Rail (2012) Mount Isa Line Rail Infrastructure Master Plan, https://www.queenslandrail.com.au/business/acccess/Documents/Maps/QR4159.1%20Infrastructure%20Master%20Plan%202012_Updated_LR.pdf 101 Ibid., p. 3 102 Ibid.
Maintenance of below rail assets — North Coast Line & West
Moreton rail
The West Moreton rail line predominantly carries coal, including that from the Surat Basin
mine and the New Acland Mine.103 The West Moreton system connects Brisbane to west
and south western regions, including as a major artery to the Darling Downs.104 The North
Coast Line is a freight and passenger line predominantly transporting sugar, grain and
livestock, but also links the Mount Isa Line to the Port of Townsville.105 Funding for the
North Coast Line and the West Moreton rail system are for the maintenance of below rail
assets, at $32.7 million and $47.8 million respectively in 2020-21. Funding for the North
Coast Line is classified as partly dedicated to fossil fuels and funding for the West Moreton
rail system is classified as primarily for fossil fuels.
CONCESSIONS
Concessions in the Budget include targeted discounts, rebates and subsidies for
Queenslanders and businesses. These are listed in the Budget’s Concessions Statement, and
include consistent concession arrangements along with additional concessions created to
support individuals, households and businesses throughout and beyond the COVID-19
pandemic, including targeted, temporary relief. Concessions include both direct budget
outlays (fee subsidy payments) and forgone revenue (i.e revenue lost through reduced fees
and charges). Only concessions above the minimum materiality threshold of $50,000
forgone revenue are included in the Concessions Statement.106 Fossil fuel concessions total
$86.9 million in the Budget.
103 Queensland Rail (n.d.) West Moreton System Information Pack - Issue 3.1, https://www.queenslandrail.com.au/business/acccess/Documents/West%20Moreton%20System%20Information%20Pack%20-%20Issue%203.1%20-%20October%202016.pdf 104 Queensland Rail (n.d.) West Moreton system, https://www.queenslandrail.com.au/forbusiness/the-regional-network/west-moreton-system 105 Queensland Rail (n.d.) North Coast line system, https://www.queenslandrail.com.au/forbusiness/the-
regional-network/north-coast-line-system 106 Queensland Government (2020) Budget Strategy and Outlook 2020-21 (Budget Paper no.2),
• North Queensland Bulk Ports Corporation Limited, primarily dedicated to fossil fuels
(various), worth $1.7 million; and
• Port of Townsville Limited, primarily dedicated to fossil fuels (oil), worth $6.8 million.
GOC concessions are for COVID-19 measures delivered to eligible organisations and
businesses, such as temporary reductions to commercial leases, fees and other charges
resulting in forgone government revenue. The Concessions Statement identifies that GOC
concessions below the minimum materiality threshold of $50,000 forgone revenue were
Fossil fuel subsidies in Australia 37
also delivered by CS Energy, Stanwell and CleanCo, which own and operate fossil fuel-
related projects and sites as detailed previously.107
GOCs also provide concessions via Concessional Leases (Industry, Commercial and
Community) to industry participants that are below commercial rates. Gladstone Ports
Corporation Limited is specifically identified for providing Concessional Port Charges where
port charges are contracted at significantly below market rates.108
107 Ibid. 108 Ibid.
Fossil fuel subsidies in Australia 38
Western Australia
Western Australia is the nation’s largest oil and gas producer, accounting for 54% of natural
gas and 80% of crude and condensate production in Australia.109 The coal industry in
Western Australia is comparatively small, producing only 1.4% of Australia’s saleable coal.110
Approximately 93% of the oil and gas produced in Western Australia is exported, while all
coal produced is used domestically, primarily in energy production.111 Fossil fuels made up
73.4% of energy generation in 2020, with half of this coming from coal; only 26.4% of energy
generation was from renewables.112
The dominance of the fossil fuel industry in the state’s energy generation and export
industry is reflected in the level of assistance it is provided by the Western Australian
Government. Table 7 shows that the Government is to spend a total of $658 million on
assisting fossil fuel industries, with $135 million budgeted for 2020-21.
Table 7: Government of Western Australia 2020-21 fossil fuel subsidies
WA budget fossil fuel assistance
Total/capital value 2020-21 expenditure
Wholly $369,174,000 $40,254,000
Primarily $7,600,000 $1,900,000
Partly $281,154,000 $93,254,000
Total $657,928,000 $135,408,000
Gas $321,435,000 $57,565,000
Gas/Oil $117,963,000 $36,544,000
Oil N/A $200,000
Coal $216,670,000 $21,023,000
Various $1,860,000 $20,076,000
Total $657,928,000 $135,408,000 Source: Government of Western Australia (2020) Budget Papers 2020-21
109 Government of Western Australia (2020) 2019-2020 Economic indicators resources data,
http://www.dmp.wa.gov.au/About-Us-Careers/Latest-Statistics-Release-4081.aspx 110 Government of Western Australia (2020) Western Australian Mineral and Petroleum statistical digest, 2019-
2020, http://dmp.wa.gov.au/About-Us-Careers/Latest-Statistics-Release-4081.aspx; Australian Government
(2020) Resources and Energy Quarterly, December 2020, Historical Data,
https://publications.industry.gov.au/publications/resourcesandenergyquarterlydecember2020/index.html 111 Government of Western Australia (2020) Major commodities resource data; Government of Western
Australia (2020) 2019-20 Economic indicators, https://www.dmp.wa.gov.au/About-Us-Careers/Latest-
Statistics-Release-4081.aspx 112 McConnell et al (2021) Energy, Western Australia,
process/12678912 117 Horizon (2020) Esperance Power Project: cleaner, greener, https://www.horizonpower.com.au/our-
community/projects/goldfields-esperance/epp/ 118 Fremantle Port (2020) Annual Report 2020, p 31 https://www.fremantleports.com.au/publications 119 Government of Western Australia (2020) 2020-21 Budget Statement, Budget Paper No. 2 – Volume 2, p 639-
40, https://www.ourstatebudget.wa.gov.au/budget-papers.html 120 Kimberly Port Authority (2020) About Port of Broome, https://www.kimberleyports.wa.gov.au/Port-of-
million in 2020-21; this sum is for the purchase of land to widen the pipeline
corridor.127
• The 353km long Mid West Pipeline, which transports gas from the Dampier-to-
Bunbury pipeline to generate power for mining and minerals processing at
Windimurra.128 The pipeline is co-owned by the state-owned power company
Horizon and private energy infrastructure business AP Pipelines. The Budget suggests
that the WA Government is investing $1 million to connect the pipeline to the
liquefied natural gas production plant in Mount Magnet, thus supplying power to
nearby gold mining companies.
• The Future Energy Cooperative Research Centre, which supports the LNG industry
with research, education and training. 129 With the support of the Federal
Government, the centre is planning to establish the LNG Futures Facility, a 10 tonne-
per-day LNG plant to be based at Kwinana. In the Budget, the centre received $1.1
million, wholly dedicated to LNG.
• The National Energy Resources Australia Partnership, a Perth-based think tank for
the gas industry funded by the Federal and state governments, along with major gas
companies. It received $500,000 in the WA 2020-21 budget.
DEPARTMENT OF MINES, INDUSTRY REGULATION AND
SAFETY
The Department of Mines, Industry Regulation and Safety is responsible for providing advice
and regulatory services to industry, and for ensuring that the state’s natural resources are
“developed and managed responsibly”. 130 The Department coordinates a range of initiatives
which support fossil fuel research and development:
• In 2020-21, $5 million was allocated to the Exploration and Incentive Scheme (EIS),
which supports the resource sector with exploration, drilling, mapping and data
collection. The EIS includes an “Energy Analysis Program” specific to petroleum and
geothermal companies.131 The EIS is an ongoing initiative in which the Western
127 Government of Western Australia (2020) Dampier to Bunbury pipeline,
https://www.dplh.wa.gov.au/projects-and-initiatives/dampier-to-bunbury-pipeline 128 APA (no date) Mid-West Pipeline, https://www.apa.com.au/our-services/gas-transmission/west-coast-
grid/mid-west-pipeline/ 129 Andrews, Karen (2020) Investing in Australia’s mining and energy future,
in-COVID-19-recovery-funding-for-resources-exploration.aspx 133 Government of Western Australia (2015) Exploration Incentive Scheme creates millions in benefits to WA,
http://www.dmp.wa.gov.au/News/Exploration-Incentive-Scheme-5059.aspx 134 Government of Western Australia (2020) $3.8 million resources export hubs to help WA recover from
recover-covid-19 135 Subsea Energy Australia (n.d.) About us, https://www.subseaenergy.org.au/about-sea/ 136 Subsea Energy Australia (n.d.) About us, https://www.subseaenergy.org.au/about-sea/
values/past-corporate-reports 143 NT Government (2020) Budget Paper 2, p89 144 NT Government (2020) Budget Paper 2, p13-14
Fossil fuel subsidies in Australia 48
have been subsumed into Investment Territory. $5 million has been included in Table 8
above as wholly attributable to the export gas industry.
MINES AND ENERGY
The Department of Industry, Tourism and Trade Mines and Energy group includes two
programs that subsidise the gas industry.
The Resource Industry Development Services program has a budget of $10.4 million this
budget year. This appears to include the $6.5 million per year “Resourcing the Territory”
exploration initiative, that provides “geoscience, investment attraction and exploration
stimulus programs”.145 This program is the successor to an earlier program, “Creating
Opportunities for Resource Exploration”, which provided $2 million per year to the onshore
gas industry.146 Table 8 assumes that this $2 million annual subsidy to onshore gas continues
under Resourcing the Territory, and is wholly dedicated to the export gas industry. Arguably,
this could be categorized as assistance to the domestic gas industry; however, most
discussion around large scale onshore gas focuses on eventual export as LNG in either new
facilities or backfilling for existing operations.147
The Energy Services program works to:
Advance the Territory’s economic development and energy security through
administration of exploration applications and permits, licences, resource
management, operational approvals and regulatory activities, including monitoring
and compliance under the Petroleum Act 1984 and Energy Pipelines Act 1981.148
A recommendation of the NT Government’s 2018 Fracking Inquiry was that the expense of
this program should be recovered from gas companies. The NT Government committed to
implement all recommendations of the Fracking Inquiry, but three years later, progress has
been minimal. According to the body charged with overseeing the recommendations of the
Fracking Inquiry:
Consultation on the proposed cost recovery system is scheduled with industry and
key stakeholders in the second half of 2021. A discussion paper for consultation on
145 Resourcing the Territory (2020) About Resourcing the Territory,
https://resourcingtheterritory.nt.gov.au/about 146 Resourcing the Territory (2019) Previous initiatives,
https://resourcingtheterritory.nt.gov.au/about/previous-initiatives 147 See for example NT Government (2020) Northern Territory gas strategy: five point plan,
https://cmc.nt.gov.au/advancing-industry/northern-territory-gas-strategy. The NT-based processing and
manufacturing discussion is unlikely to eventuate, see Campbell (2020) Why onshore gas will not help
manufacturing in the NT, https://australiainstitute.org.au/post/fracking-cant-fire-up-nt-manufacturing/ 148 NT Government (2020) Budget Paper 2, p78
the proposed cost recovery system is now being prepared by the Department of
Treasury and Finance (DTF) for consideration by Cabinet.149
With discussion paper documents still being prepared, the under-recovery of costs looks set
to continue. This coincides with a major increase in the budget of this program, as shown in
Figure 8 below:
Figure 8: Energy Services budget
Source: NT Budget papers, various years
As shown in Figure 8 above, the amount allocated to Energy Services has more than tripled
in this budget, with no justification given. Revenue from applications, licence and title fees is
no longer reported separately in the NT budget papers, reducing transparency, and there is
no reason to expect a major increase in this revenue given the impact of the pandemic on
the NT onshore gas industry.150 Table 8 includes this estimated $6.9 million gap in cost
recovery as an annual, wholly-devoted subsidy to the export gas industry.
149 Ritchie (2020) Progress on the implementation of recommendations from the final report of the hydraulic
fracturing inquiry-1 May to 31 October 2020,
https://cmsexternal.nt.gov.au/__data/assets/pdf_file/0006/956049/dr-ritchie-update-oct-2020.pdf 150 Claughton et al (2020) Mining exploration and service companies hit by coronavirus restrictions,
Victoria’s fossil fuel industry consists primarily of brown coal mines and power stations in
the Gippsland region. Fossil fuel subsidies related to the brown coal industry are primarily
provided to fund mining site rehabilitation and the Victorian Government’s Earth Resources
Regulator. As the moratorium on onshore conventional gas exploration in Victoria has been
overturned, the Victorian Government’s Budget 2020-21 also includes funding to support
and regulate the recommencement of exploration. A significant portion of fossil fuel
spending in the Budget 2020-21 supports the development of hydrogen pilot projects and
carbon capture and storage (CCS) projects, both of which are intended to complement
existing fossil fuel projects in the State.
Table 9: VIC Government 2020-21 Budget fossil fuel subsidies
VIC budget fossil fuel assistance
Total/capital value 2020-21 expenditure
Wholly $140,220,000 $19,720,000
Primarily $0 $6,900,000
Partly $0 $73,200,000
Total $140,220,000 $99,820,000
Coal $131,400,000 $19,900,000
Gas $8,820,000 $6,720,000
Various $0 $73,200,000
Total $140,220,000 $99,820,000 Source: VIC Government (2020) Budget Papers 2020-21
RESOURCES OUTPUTS
The Department of Jobs, Precincts and Regions’ “Resources Output” funds and administers
exploration and mining licenses, provides industry geoscience data packages for petroleum,
and has carriage of the CarbonNet CCS Project. ‘Resources outputs’ is the largest fossil fuel-
related budget item. While part of the program’s activity is related to administration that
may be funded by industry levies, little information is available as to the extent of resources
devoted to industry support and assistance. Some programs make it clear that assistance is
significant.
The key example of this program working to assist, rather than just regulate, the fossil fuel
industry is CarbonNet. This CCS network project in Gippsland was established in 2010 as
part of the Australian Government’s Carbon Storage Taskforce and National Low Emissions
Coal Initiative. This initiative identified the Gippsland Basin as the most appropriate choice
for a long-term carbon storage project in Victoria, due to both technical requirements and
Fossil fuel subsidies in Australia 51
the region’s close proximity to major coalfields, electricity generators and industrial
processors, along with and suitable offshore and onshore storage sites: “[Victoria’s] largest
sources of CO2 are all located within a 15km radius…It offers an opportunity for shared
infrastructure and a multi user CCS network”.151
More than a decade later, CarbonNet is not operational and currently claims to be in “Stage
Three (Project Development and Commercial Establishment)”.152 The project site claims to
have the capacity to store five million tonnes (Mt) of CO2 per year for 25 years.153 This is a
fraction of the emissions from Victoria’s coal-fired generators Loy Yang, Loy Yang B and
Yallourn, which in 2016 emitted 43 Mt CO2 equivalent, representing 38% of Victoria’s total
greenhouse gas emissions.154
The CarbonNet Project identifies opportunities to align with fossil fuel projects.155 These
include Gas Vision 2050, promoting the continued use of gas as a major energy source in
Australia (with emissions reductions achieved through the use of CCS);156 a proposed
Gippsland Hydrogen Cluster with National Energy Resources Australia;157 Carbon Capture,
Utilisation and Storage and Enhanced Oil Recovery projects;158 and a possible future
partnership with the Hydrogen Energy Supply Chain project, which includes blue (fossil fuel
and CCS) hydrogen.159
In May 2020, the Australian Government passed new legislation — the Offshore Petroleum
and Greenhouse Gas Storage Amendment Bills — to allow the drilling and injection of CO2
into underground reservoirs.160
151 Global CCS Institute (2015) The CarbonNet Project: A Historical Perspective, https://www.globalccsinstitute.com/archive/hub/publications/155928/carbonnet-project-historical-perspective.pdf, p. 9. 152 Victorian Government (2020) The CarbonNet Project, https://earthresources.vic.gov.au/projects/carbonnet-project/about-the-project 153 Ibid. 154 Victorian Government (2018) Victorian Greenhouse Gas Emissions Report,
Emissions-Report-2018.pdf 155 Victorian Government (2020) CarbonNet newsletter, https://earthresources.vic.gov.au/projects/carbonnet-
project/news-and-events 156 Energy Networks Australia (2020) Gas Vision 2050, https://www.energynetworks.com.au/resources/reports/2020-reports-and-publications/gas-vision-2050-delivering-a-clean-energy-future/ 157 CarbonNet Project (2020) 29 October 2020 Newsletter,
https://earthresources.createsend1.com/t/ViewEmail/r/4141A4FA4C8668742540EF23F30FEDED 158 CarbonNet Project (2020) 28 August 2020 Newsletter,
https://earthresources.createsend1.com/t/ViewEmail/r/142F64CEDD110B4A2540EF23F30FEDED 159 CarbonNet Project (2020) 30 January 2020 Newsletter, http://createsend.com/t/r-
78D6A8BB92CE89B82540EF23F30FEDED 160 Maisch (2020) Morrison government paves the way for brown hydrogen industry, https://www.pv-
perspective.pdf 162 Parkinson (2018) Turnbull’s brown coal hydrogen horror show: $500m for 3 tonnes, https://reneweconomy.com.au/turnbulls-brown-coal-hydrogen-horror-show-500m-for-3-tonnes-70932/ 163 Hydrogen Energy Supply Chain (n.d.) Latrobe Valley, https://hydrogenenergysupplychain.com/latrobe-valley/ 164 Australian Government (2018) Hydrogen Energy Supply Chain Pilot Project, https://www.industry.gov.au/funding-and-incentives/low-emissions-technologies-for-fossil-fuels/hydrogen-energy-supply-chain-pilot-project 165 Hydrogen Energy Supply Chain (n.d.) Community and sustainability, https://hydrogenenergysupplychain.com/community-and-sustainability/ 166 Australian Government (2018) Local jobs and a new energy industry for the LaTrobe valley,
The Victorian Government announced in March 2020 that it would overturn a moratorium
on the exploration of onshore conventional gas reserves, which had been in place since
2017, allowing exploration to restart from 1 July 2021.167 The Victorian Budget 2020-21
allocates funding to “develop, implement and enforce” a new regulatory regime for
Victorian onshore conventional gas exploration. The overturned restrictions and funding
follow findings from the Victorian Gas Program that an onshore conventional gas industry
would not compromise Victorian environmental and agricultural credentials.168 Emissions
from extracting gas are estimated to be 122,000 to 329,000 CO2-e annually.169
Funding for the restart of onshore gas exploration is $5.1 million in total, with $3 million in
2020-21, dedicated wholly to fossil fuels.
GAS ROADMAP
The 2020-21 Budget includes funding for a “gas roadmap” to support the efficient use of
gas, assessing the viability of gas as an industrial feedstock, developing renewable gas
resources (hydrogen or biogas), and substituting gas with hydrogen, biogas or
electrification.170 There is no publicly available information on the developmental progress
of the gas roadmap and the initiative’s description does not specify the intention to move
away from fossil gas as an energy source. Additionally, transitioning towards hydrogen fuel
in Victoria is likely to support the fossil fuel industry, given that the Victorian Government is
also funding a brown hydrogen pilot project and CCS technology.
Funding for developing a gas roadmap is $3.7 million171 in 2020-21 and is classified as wholly
dedicated to fossil fuels.
REHABILITATION OF MINES AND QUARRIES
Additional funding for mine site rehabilitation was granted through expanded functions for
the Earth Resources Regulator and the establishment of the Mine Land Rehabilitation
Authority (MLRA). The MLRA replaces the Latrobe Valley Mine Rehabilitation Commissioner,
167 Mazengarb (2020) Victoria lifts moratorium on onshore gas, but permanently bans fracking, https://reneweconomy.com.au/victoria-lifts-moratorium-on-onshore-gas-but-permanently-bans-fracking-91726/ 168 Victorian Government (2020) Restrictions on onshore gas, https://earthresources.vic.gov.au/geology-exploration/oil-gas/restrictions-on-onshore-gas 169 Earth Resources (2020) Victorian Gas Program: Progress Report #5,
https://earthresources.vic.gov.au/__data/assets/pdf_file/0020/613091/VGP_PR05-161926-Low-res.pdf 170 Victorian Government (2020) Budget Paper 3: Service Delivery, https://www.budget.vic.gov.au/budget-
papers 171 Victorian Government (2020) Budget 2020-21, https://www.delwp.vic.gov.au/our-department/budget-
taking responsibility for managing the Latrobe Valley Regional Rehabilitation Strategy.172
This includes overseeing the rehabilitation of Latrobe Valley coal mines, other coal mines
that pose risk to community, environment or infrastructure and “promoting the sustainable
and beneficial use of coal mine land in the region”.173 The MLRA currently monitors three
brown coal mines in Victoria: Loy Yang (scheduled for closure in 2048), Yallourn (scheduled
for closure in 2028) and Hazelwood (closed in 2017), all of which are on privately owned
land.174
This ongoing funding for mine rehabilitation management is $6.9 million in 2020-21,
dedicated primarily to fossil fuels.
172 Victorian Government (2020) Latrobe Valley Regional Rehabilitation Strategy, https://earthresources.vic.gov.au/__data/assets/pdf_file/0010/558802/LVRRS-What-is-the-Mine-Land-Rehabilitation-Authority-factsheet.pdf 173 Victorian Government (2020) Latrobe Valley Regional Rehabilitation Strategy,
Accelerating Exploration Gas, which funds companies to extract and supply more gas to the
South Australian market.179
ELECTRICITY AND GAS TECHNICAL AND SAFETY
REGULATION SUBPROGRAM
This ongoing subprogram was allocated $6.2 million in the Budget, and partly assists the gas
industry through involvement with gas mains replacement, other aspects of the gas
network, and development of hydrogen as a fuel without specific commitment to green
hydrogen.180
PORT BONYTHON JETTY REFURBISHMENT
The only capital works identified as relevant to the fossil fuel industry in the South
Australian budget papers is the Port Bonython Jetty Refurbishment.
Port Bonython is the site of a gas and diesel importation and distribution hub; its jetty is
leased by the state to Santos, who use it to export LPG, crude oil and naphtha. In the
budget, $30 million was dedicated, over three years, to the refurbishment of the jetty,
including the cost of upgrades to lighting, handrails, winches and a fire tower. Some $7
million over four years was also announced for operating expenses.181 In 2020-21, $5 million
will be spent on upgrades to, and operation of, the jetty.
In 2020, the South Australian Premier, Steven Marshall, announced that investment in Port
Bonython would be part of the state’s plan to export green hydrogen.182 However,
according to a budget statement, the $37 million earmarked for investment was in fact “to
carry out critical maintenance works on the jetty to ensure the ongoing use of the port for
oil and gas exports.”183 As a result, this funding has been classified as wholly dedicated to
fossil fuels.
179 Government of South Australian (2020) Budget Paper 4, Volume 2, p 115, 180 Government of South Australian (2020) Budget Paper 4, Volume 2, p 120 181 Government of South Australia (2020) Budget Paper 5: Budget Measures Statement, p 91,
https://statebudget.sa.gov.au/#Budget_Papers 182 Steven Marshall MP (2020) World-leading $240 million hydrogen project launched, supported by $37 million
upgrade to Pt Bonython jetty, https://www.premier.sa.gov.au/news/media-releases/news/world-leading-
$240-million-hydrogen-project-launched,-supported-by-$37-million-upgrade-to-pt-bonython-jetty 183 Government of South Australian (2020) State Budget 2020-21: supporting small business in regions,
20%20Annual%20Report%20of%20the%20Coal%20Innovation%20NSW%20Fund.pdf 190 NSW Government (2020) Coal Innovation NSW: Income, expenditure and project evaluation, p 9,
20%20Annual%20Report%20of%20the%20Coal%20Innovation%20NSW%20Fund.pdf 191 NSW Government (2020) Clean Hydrogen Report,
https://www.resourcesandgeoscience.nsw.gov.au/investors/coal-innovation-nsw/clean-hydrogen-report 192 NSW Government (2020) Coal Innovation NSW: Income, expenditure and project evaluation, p 5-7,
and-Petroleum-Administrative-Fund-and-the-Investment-Fund-Annual-Utilisation-Report-2020.pdf 197 Ibid. See also Department of Regional NSW (2020) Annual report 2019-20,
Tasmania’s fossil fuel subsidies are significantly smaller than those elsewhere in Australia
due to the nature of Tasmania’s electricity system, which has been dominated for over a
century by hydroelectricity. In November 2020, Tasmania met its 100% renewable energy
target two years early,198 and in fact exceeded the 100% renewable generation milestone
when the Granville Harbour wind farm came online, allowing the state’s renewable
generation to exceed demand.199 Tasmania now aims to reach 200% renewable energy
generation, with the surplus exported to other states.200 The Tasmanian Government’s
Budget 2020-21 also provides for investment in large-scale, entirely renewable hydrogen
projects.201
Fossil fuel projects in Tasmania include:
• The Tasmanian Gas Pipeline, which supplies natural gas to Tasmania from Victoria. It
is part of a larger network of underground gas pipelines that span Australia.202
• The Bell Bay and Tamar Valley Power Station, which are both gas-fired generators,
operated by TW Power Services and Hydro Tasmania.203
• A small operating coal company, Cornwall Coal, that supplies to industrial users and
various speculative export coal proposals.
In 2019 subsidies to two coal ventures made headlines in Tasmania, with government grants
of $23,000 and $50,000 used for coal exploration.204 While both these companies appear to
have stalled, another, Hardrock Coal Mining, claims it will begin operation of its Fingal Tier
Coal Project in 2021.205
198 Marchant (2020) Tasmania is now powered entirely by renewable energy, https://www.weforum.org/agenda/2020/12/tasmania-renewable-energy-sustainable-hydropower/ 199 Mazengarb (2020) Tasmania declares itself 100 per cent powered by renewable electricity, https://reneweconomy.com.au/tasmania-declares-itself-100-per-cent-powered-by-renewable-electricity-25119/ 200 Marchant (2020) Tasmania is now powered entirely by renewable energy,
https://www.weforum.org/agenda/2020/12/tasmania-renewable-energy-sustainable-hydropower/ 201 Marchant (2020) Tasmania is now powered entirely by renewable energy,
https://www.weforum.org/agenda/2020/12/tasmania-renewable-energy-sustainable-hydropower/ 202 Tasmanian Gas Pipeline (n.d.) Home, https://www.tasmaniangaspipeline.com.au/ 203 Hydro Tasmania (n.d.) Gas generation, https://www.hydro.com.au/clean-energy/our-power-stations/gas-generation TW Power Services (n.d.) Bell Bay Power Station, https://www.twps.com.au/project/bell-bay-power-station/ 204 Coulter (2019) Coal mining's potential resurgence in Tasmania prompts concerns from farmers,
In 2014, The Australia Institute published a report on state government assistance to the
broader mining industry, titled Mining the age of entitlement.209 The title was a reference to
then-Treasurer Joe Hockey’s claim that “the age of entitlement was over”, made as he
prepared the public for the massive service cuts proposed in the 2014 budget. That budget
ended Hockey’s political career; he was subsequently given a role as Australia’s ambassador
to the United States, with seemingly no reflection on whether such an appointment
reflected a degree of entitlement.
Like many of his predecessors, both Liberal and Labor, over the past 40 years, Hockey’s
rhetoric was based in market-rationalist rhetoric — and part of this doctrine is that subsidies
are necessarily a bad thing. At the time of his speech, the Federal Government of which he
was a part made a point of rejecting subsidies for car manufacturers and seemed to relish
the subsequent decline of that industry. Hockey rejected calls for assistance from regional
food processors.
But as Hockey called on all Australians to do the “heavy lifting”, perhaps by paying more to
go to the doctor or just forgoing mental health treatment altogether, our report estimated
that assistance worth $18 billion had gone to the mining industry. That industry had just
fought against, and defeated, the Rudd/Gillard Government’s mining and carbon taxes, and
in doing so, had convinced much of Australia —and, seemingly, even itself — that it was a
“lifter not a leaner” in the Australian economy. The peak bodies in every state even
managed to commission a report claiming that mining and fossil fuels were not subsidised at
all in Australia.210
Even before the COVID-19 pandemic made major government assistance to industry (and
even the unemployed!) palatable, this pretense had been dispensed with. More than
anything, it was made untenable by the very public multi-year battle fought by state and
federal governments to subsidise Adani. The death knell, perhaps, came when former
Resource Minister Matt Canavan said the quiet part very loudly indeed, admitting that “a
leg-up from taxpayers helped get all new mining regions off the ground” and that “we’d
done it for every other coal basin in the past”.211 Other debates — around fuel tax credits,
PRRT exemptions and CCS programs — also dismantled the “no subsidies for fossil fuels”
209 Peel et al (2014) Mining the age of entitlement: State government assistance to the mining and fossil fuel
sector, https://australiainstitute.org.au/report/mining-the-age-of-entitlement/ 210 Castalia (2014) Mining the Age of Entitlement? Report Prepared for the Australian Mining and Resources
Sector, No active links found, available on request. 211 Ludlow (2017) Matt Canavan, a communist turned economist in a bushie's hat,